Prepare the oven and pan. Preheat the oven to 350°F. Cover a baking sheet with parchment paper or a silicone baking mat to help prevent sticking.
Combine the cookie dough. Place the vanilla cake mix, egg, thawed whipped topping, and vanilla extract in a large mixing bowl. Beat the ingredients together until evenly incorporated. The finished mixture should have a thick, sticky consistency.
Divide and tint the mixture. Separate the dough evenly between two bowls. Stir a couple of drops of red gel coloring into one portion and a couple of drops of green gel coloring into the other.
Develop the colors. Mix each portion thoroughly until the coloring is evenly distributed. Add additional gel coloring when necessary to produce bright, vibrant red and green tones.
Prepare the sugar coating. Pour the confectioners’ sugar into a small bowl. Portion the sticky dough with a small cookie scoop or a 1-tablespoon measuring spoon.
Coat and arrange the cookies. Working with one scoop at a time, roll each portion thoroughly in the powdered sugar until completely covered. Arrange the coated dough portions on the prepared baking sheet, leaving at least 2 inches between them because the cookies will spread considerably while baking.
Bake until set. Place the baking sheet in the preheated oven and bake for 12–15 minutes, or until the edges have set. The centers should remain soft when the cookies are removed from the oven.
Cool the cookies. Allow the cookies to rest on the baking sheet for 5 minutes. Carefully move them to a wire cooling rack and leave them there until completely cooled.